Calling China? Corruption Taints the Lucrative Telecoms Business.

Another day, another corruption scandal. So goes life in China, where tales of official graft are so common that a newspaper wouldn’t be complete without a rundown of the sordid details. But even by Chinese standards, this one looks like a doozey. According to state media—and by the time it appears in the official press, chances are the cases will be juicy ones—middle-level managers and up at China’s three biggest telecoms firms are being investigated by the national anti-corruption agency, the Central Commission for Discipline Inspection.

That’s not to say that everybody being investigated at China Mobile, China Unicom and China Telecom will be charged. Far from it. But the scope of the probe into this fast-growing industry is “unprecedented,” according to the state-run Xinhua News Agency. Since 2009, more than a few China Mobile executives have been implicated in graft schemes, reported Caixin, one of China’s few enterprising business weeklies. Caixin says that senior executives at all three state-owned telecoms firms have been ordered to hand in their passports, lest they attempt to flee the country.

In March, Ma Li, the deputy general manager of China Mobile’s data services sector was investigated in connection with a $54 million graft case involving some 60 million people, according to the government-run Economy & Nation Weekly. Last year, the general manager of China Mobile’s wireless music department in central Sichuan province tried to escape to Canada with millions of dollars in cash. In 2009, Zhang Chunjiang, China Mobile’s then communist party secretary, one of the company’s most venerable positions, was sacked and eventually expelled from the Communist Party for allegedly taking bribes.

With 584 million subscribers at the end of 2010, China Mobile is the world’s largest mobile carrier. (China Unicom had 311 million users and China Telecom 90.5 million—not exactly tiny businesses either of them.) Data services have propelled profits, with China Mobile reporting 2010 fourth-quarter sales of $20.4 billion. China Mobile is also venturing into land deals—one of the most lucrative and notoriously corrupt sectors of the Chinese economy—by co-bidding for prime commercial land in Beijing, according to Caixin. With central government auditors combing through the telecoms giants’ records, who knows what they will turn up next?